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Does a "spawn spender" live in your basement?

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Millennials are often perceived as wastrels who buy every expensive gadget, jump jobs on a whim, live with their parents and mooch off them to boot.

A recent survey by Fidelity Investments found that at least some of these urban myths could be true. The 2016 Millennial Money Study discovered that nearly half of the generation aged 25 to 35 still receive financial assistance from their parents, according to these millennials themselves and their somewhat poorer parents.

Fidelity also found that about 21 percent of millennials still live with their parents. That’s up from 14 percent just two years ago.

The survey didn’t just cover suburban soccer moms and dads who had accounts with Fidelity, tend to be child-focused and have a substantial income. It represents the entire U.S. population with a high degree of accuracy, said a company spokeswoman. 

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And if the survey is right, millennials often ask parents for money, but don’t divulge what they spend it on. Nearly a quarter won’t tell mom and dad how much they spend for entertainment and clothes. About the same number don’t want to talk about their debt. And 23 percent say they tell their parents absolutely nothing.

That can be tough on these old progenitors. Having raised their children and most likely paid for college, some of these parents are trying to wind down into a well-earned retirement. The average age of the father in the survey is 60 and the mother 57. And while 35 percent of them no longer work, in many instances they still pay a portion of junior’s bills.

“I see a lot of money flowing out of parents’ accounts to ‘spawn spenders,’” said President Ken Mahoney of Mahoney Asset Management in Spring Valley, New York.

He agrees with the Fidelity findings, and from his suburban perspective thinks the actual number of older folks forking over cash may be even higher. “Often I see a son or daughter with a new car, and the parents driving one that’s 14 years old.”

Parents who don’t puncture the life raft and let sonny boy (and it’s usually the son, he said) swim on his own have two problems. First, they’re “enabling” the kid to remain tethered to them -- perhaps forever. Second, they’re depleting their own retirement accounts, possibly beyond repair.

“It’s a see-saw,” said Mahoney. “The more [the offspring] get, the less you save.”

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Still, the Fidelity survey isn’t unrelentingly negative. While 44 percent of the millennials admit they’re “spenders,” 46 percent say they’re “savers,” possibly because they need a reserve in case of a job change. “Millennials have set aside an average of $9,100 in an emergency fund, more than other generations,” according to the survey.

With an average age of 30, about 40 percent are married and presumably not living in the basement, and more than half have children of their own. Approximately 70 percent are employed at an average salary of $68,000.

In fact, a Zillow survey on consumer housing trends found that millennials were now “driving the market,” although nearly a third of them find that their savings aren’t enough for a down payment on a home and have to rely on “gifts and loans.”

While most 25- to 35-year-olds are becoming self-sufficient, “inevitably one child is a black sheep who can’t get on the road,” said Mahoney, and needs more help than the rest. Parents -- at least middle-class parents -- can’t turn him or her away. The others generally just use mom and pop as an occasional piggy bank for that recurring cell phone upgrade.

Talking with your child about cutting off that revenue stream is tough. “Money is as taboo as sex,” said Mahoney. But there comes a time when it has to be done. He suggests two strategies:

An appeal to conscience. Tell your child that if he or she keeps mooching, mom and dad will end up in the poorhouse, be unable to quit their jobs or, at the very least, have an unhappy retirement.

The carrot and the stick. Offer a certain amount of money for a certain amount of time, such as finishing graduate school with a B average in two years -- and then cut them off.

So how many parents actually stick to the plan? “I live in the Hudson Valley,” Mahoney said. “People here are helicopter parents. They hover over their kids.”

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